The government is ready to import at least 70 to 80 million metric standard cubic metres (mmscm) of natural gas for India’s idle gas-based power plants if it can secure long-term ‘affordable’ rates, Piyush Goyal, Minister of Power, said.“This will enable India to operate its idle gas-based power capacity,” Mr. Goyal said addressing a conference on ‘The Future of Electricity’. Obtaining the required gas will lead to the re-starting of 20,000 MW of idle power capacity in India. The minister recently visited Australia and secured assurances for gas supply at $5 per mmbtu but suppliers were not willing to sign long-term contracts.

“If the government gets gas at $5 per mmbtu, gives custom duty waiver, reduces marketing margins and gas transportation charges by half and reduces inter state transmission charges to zero, the industry will be able to absorb the price” Sushil Maroo, MD & CEO, Essar Power Limited, told The Hindu.

As to what ‘affordable’ price sellers would agree to for long-term contracts, Anish De, Partner, KPMG, said, “The international market is oversupplied on gas.”

Adding that this could go on for five years or more, he said, “Earlier, suppliers were not looking at long-term contracts in the region of 7-10 years, he said. “They might look at it now.”